AIB 2012 Conference Proceedings - Academy of International ...

MONDAY
This paper explains the application of propensity score matching for analyzing causality relationships in
international and strategic management. Unlike the controlled experiments available in natural sciences, it is
extremely difficult in international and strategic management to establish causal treatment effects in firms. Most
methods fall short in identifying proper control groups and, as a result, may generate misleading conclusions.
We propose using a simple approach that allows researchers to preprocess data with propensity score matching
and combine it with commonly used parametric techniques to identify an appropriate control group and
evaluate the impact of treatment. We illustrate the power of this technique over others by analyzing differences
in performance between firms acquired by foreign companies and those acquired by domestic ones. (For more
information, please contact: Alvaro Cuervo-Cazurra, Northeastern University, USA: a.cuervocazurra@neu.edu)
Session: 2.2.7 - Competitive
Track: 3 - IB Theory, FDI, and Entry Mode
Enduring Distance
Presented On: July 2, 2012 - 10:45-12:00
Chair: David A. Ralston, Florida International University
Reconsidering the Concept of Distance in Internationalization Research
Thomas Hutzschenreuter, WHU
Ingo Kleindienst, WHU
Sandra Lange, WHU
In this study we offer a new perspective on the distance concept by raising awareness to the fundamental role
of the reference point in determining distance. We question the IB field's consistent use of the home country
reference point and offer theoretically inferred alternative reference points. Specifically, drawing on insights
from the organizational learning and MNE knowledge transfer literatures, we reason that a focal unit entering a
new context may actually rely on knowledge sources other than the home country in order to narrow the
knowledge gap in the new context. We illustrate the differences in distances resulting from the use of
alternative reference points by means of several exemplary cases. Finally, the implications for distance-related
research are discussed. (For more information, please contact: Thomas Hutzschenreuter, WHU, Germany:
th@whu.edu)
Multidimensional Distances and Location Choice: An Empirical Study of Chinese Outward Foreign Direct
Investment
Na Ma, Tsinghua University
Dong Chen, Loyola Marymount University
This study examines how multidimensional distances, including cultural, institutional, economic, and geographic
distances, affect the location choice of Chinese outward foreign direct investment (OFDI). Ascribing to the
potential benefits and costs of various distances, we suggest that Chinese OFDI flow into different countries has
a sigmoid (S-shaped) relationship with cultural distance, a positive relationship with institutional distance, an
inverted U-shaped relationship with economic distance, and a negative relationship with geographic distance.
The hypotheses are tested using country-level Chinese OFDI data between 2003 and 2009. Our empirical
results provide support for the hypothesized effects of cultural, institutional, and economic distances.
Furthermore, the effects on institutional and economic distances are negatively moderated by geographic
distance. The study offers an integrative view of multidimensional distances between countries and provides
important insights on the OFDI activities of Chinese companies. (For more information, please contact: Dong
Chen, Loyola Marymount University, USA: dchen@lmu.edu)
AIB 2012 Conference Proceedings
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